Our web team has finished transferring the True Alpha archives over to the Agora Financial website.
From this point forward, you can access all of my research at www.AgoraFinancial.com.
The True Alpha archives can be found in the True Alpha section under the “My Subscriptions” tab at the very top.
Click on the “Alerts” tab for the full legacy archive.
Also, in the “Issues” tab, you’ll find some bonus research from my time at Digital Fortunes. All future monthly issues can be found here, as well.
You can log in using the temporary username and password below.
If you have any questions, feel free to contact Agora Financial’s customer service team at 1-800-708-1020, or drop them a line at email@example.com.
Earnings Onslaught Ahead
Outside of an unsolicited takeover offer, the only thing that moves a stock price higher, and faster is a strong earnings report.
And we’re only days away from the first set of reports from our portfolio companies.
To help you keep track of all the activity, we’ve created this handy earnings calendar.
Look for a rundown on each company before its upcoming report, as well as afterwards.
Of course, we’ll also alert you to any urgent developments that require your immediate attention.
With that in mind, it’s time to talk about Mobileye N.V. (NYSE:MBLY).
The Countdown to a Driverless Future
Mobileye is at the forefront of the semi- and fully-autonomous driving trend.
More specifically, it’s the leading supplier of cutting-edge, vision-based sensing chips, which facilitate advanced driver assistance systems (ADAS).
I know some of you remain unconvinced that we’ll see driverless cars anytime soon – but don’t be so sure.
They’ll be here within three years. (That’s not a typo, that’s simply foresight.)
Look Ma, No Hands!
A little over a month ago, Mobileye co-founder, CTO, and chairman Amnon Shashua revealed that two unnamed automakers have “fully committed” to receive systems for completely autonomous cars in 2019.
In conjunction with a recent partnership announcement with Intel Corp. (Nasdaq:INTC) and BMW, Mobileye revealed that a fully-autonomous car platform for the fleet market will be ready by 2021.
And based on the latest survey from investment bank Piper Jaffray, demand already exists for the product by businesses that use car fleets.
“[Our] survey uncovered rising acceptance of advanced driver assistance systems (or ADAS), which are designed to increase safety and cut costs by using varying degrees of automation in the driving process,” said analyst Alexander Potter.
So either way you look at it, we’re only three to five years away from a parabolic increase in adoption rates for self-driving technologies.
As an investor, that means the time to position our portfolios to profit from the trend is now. And there’s no better pure-play opportunity than Mobileye.
The company counts more than 20 top automakers as customers for its EyeQ chips.
It’s also in the pole position within another key area of the market – collecting and updating mapping data so that vehicles can safely navigate all roads.
Miles and Miles of Data
As Tesla’s visionary leader Elon Musk shared in his latest master plan this week: “We expect that worldwide regulatory approval [for driverless cars] will require something on the order of six billion miles (10 billion kilometers).”
Sounds like a Herculean task. Believe it or not, however, it’s attainable within the next three to five years, based on current data-tracking rates.
And that’s where Mobileye comes in, yet again.
In addition to its chips, the company makes a software system called Road Experience Management (REM), which collects major landmark and road information every kilometer.
The company already counts General Motors Co. (NYSE:GM), Volkswagen AG (OTC:VLKAY), and Nissan Motor Co. Ltd. (OTC:NSANY) as REM buy-ins.
RBC Capital analyst Joseph Spak estimates the GM partnership alone will enable Mobileye to collect more mapping data than Tesla Motors Inc. (Nasdaq:TSLA) and Alphabet Inc.’s (Nasdaq:GOOGL) Google. Combined.
“Once fully deployed, this will allow GM [and Mobileye] to collect 100 million miles of data per day in the U.S. alone,” says Spak.
That compares to about 3 million miles of road data per day for Tesla and 2.7 million miles of road data for Google since 2009.
Add it up and our driverless future should amount to serious profits.
That being said, Mobileye is a notoriously volatile stock around earnings.
While I currently rate the stock a “Buy,” more conservative investors might consider legging into a position – buying some now and then some after the report to take advantage of any undue volatility.
Editor, True Alpha